U.S. Bancorp

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U.S. Bancorp

111 S.W. Fifth Avenue
P.O. Box 8837
Portland, Oregon 97208
U.S.A.
(503) 275-6111
Fax: (503) 275-6568

Public Company
Incorporated: 1968
Employees: 10,610
Total Assets: $21.8 billion
Stock Exchanges: NASDAQ
SICs: 6712 Bank Holding Companies; 6021 National
Commercial Banks; 6022 State Commercial Banks

One of the 30 largest banking organizations in the United States, U.S. Bancorp is a regional multi-bank holding company for two retail and commercial banks, United States National Bank of Oregon and U.S. Bank of Washington. During the mid-1990s, United States National Bank of Oregon ranked as the largest bank in Oregon and the 52nd largest bank in the country, while U.S. Bank of Washington ranked as the third largest bank in its home state and the 99th largest nationally. Aside from these two principal subsidiaries, U.S. Bancorp owned numerous other subsidiaries involved in a variety of financial services, including mortgage banking, lease financing, consumer and commercial finance, discount brokerage, investment advisory services, and insurance agency and credit life insurance services. The breadth of U.S. Bancorp’s business activities developed from the founding of United States National Bank of Oregon (originally incorporated as United States National Bank of Portland) in 1891 and its efforts to diversify its business by organizing U.S. Bancorp as a one-bank holding company in 1968.

U.S. Bancorp was organized as a holding company by the United States Bank of Oregon in the late 1960s, a time when many large banks across the country acknowledged and fostered their transformation into diversified financial services organizations by forming bank holding companies. The company’s historical roots, however, stretch back nearly a century before the descriptive phrase “diversified financial services organizations” became part of banking nomenclature, reaching back into the late 19th century to a simpler age when the business of banking comprised the rudimentary tasks of receiving deposits, cashing checks, and extending and collecting loans. Banking would develop into a much more sophisticated business by the time U.S. Bancorp first emerged in the late 1960s, but the company’s true origins stemmed from the efforts of a handful of wealthy and influential businessmen during the early 1890s and their organization of The United States National Bank of Portland.

From out of the uncharted Portland wilderness, Oregon developed into a bustling commercial and industrial hub during the 19th century, its growth propelled by successive waves of settlers into the Pacific Northwest and the subsequent establishment of a spectrum of businesses and industries. As the community evolved from a secluded settlement into a burgeoning town, and finally into one of the principal cities underpinning the Pacific Northwest’s economy, banks were there to promote and support its growth, serving as a crucial source of capital in a region far removed from the established financial centers in the eastern United States. Starting in 1859, when the first national bank in Portland, the Ladd and Tilton, was organized, Portland’s business operators began to feed off the financial support of banks, using them as source for loans to develop their enterprises. As the town grew, requiring more and more capital to fund its development, the number of banks increased, totaling five in the state of Oregon by 1872, then jumping to 16 by 1880. Roughly a decade later, when more than 40 national banks were operating in Oregon, United States National Bank of Portland (U.S. National) was organized, founded by nine businessmen who created a banking institution that more than a century later would dominate the Pacific Northwest bank industry and rank as one of the largest financial services organizations in the country.

Led by Donald MacLeay, an immigrant from Scotland who made his fortune in the grocery and shipping business, and George Washington Ewing Griffith, a wealthy Kansas businessman, the founding directors, all of whom were born outside of Oregon, organized U.S. National on February 5, 1891, then opened the bank four days later in rented offices in downtown Portland. Although U.S. National operated without a vault during its inaugural year, the apparent lack of security did not dissuade customers from bringing their banking business to the city’s newest bank. During the bank’s first day, 15 customers opened new accounts, depositing a total of $21,886.30. By the end of its first year, fledgling U.S. National had become a thriving enterprise, holding $450,000 in deposits and capital stock and administering more than $350,000 in loans. It was an encouraging start for U.S. National, but before there was much chance for celebration, economic conditions in Oregon and throughout the nation soured, providing the bank with its first great test of resiliency while still in its infancy.

In 1893, two years after U.S. National began operating, a severe economic depression gripped the country, devastating more than 500 of the nation’s banks and more than 16,000 businesses by the end of the year. Among the victims of the harsh economic conditions were a number of stable and respected Portland banks, but despite its status as neophyte in the area’s banking community U.S. National beat back the debilitating affects of the economic downturn. The bank’s deposits slipped from a high of more than $400,000 in 1892 to less than $340,000 in 1896. But when the discovery of gold in the late 1890s swept away any lingering effects of the economic depression in the Pacific Northwest, U.S. National emerged stronger than ever before. For this strength the bank was indebted to the financial malaise of the early and mid-1890s, a deleterious period for many banks that left U.S. National occupying a more powerful position. Of Oregon’s 41 national banks operating in 1892, only 27 remained after the depression, creating a more consolidated banking industry that buoyed U.S. National’s position considerably. Of these 27 national banks that remained in business during the late 1890s, only four would survive to compete during the 20th century: Ainsworth National, Merchants National, First National, and the upstart U.S. National.

Less than a decade old at the turn of the century, U.S. National had already passed Ainsworth National in volume of business to rank as the third largest bank and was gaining ground on Merchants National to secure the industry’s second position. Growth would come quickly during the first decades of the new century as bankers recouped their losses from the 1890s and shared in the prosperity of the times. During the first decade of the century, the number of national banks in Oregon increased from 27 to 75 and deposits quadrupled, as the city of Portland, with 200,000 residents by 1910, flourished economically. As one of the city’s stalwart banks, U.S. National benefited greatly from the more robust economic conditions and was able to conclude several pivotal transactions that secured its inclusion among the region’s leading banks. In 1902, U.S. National and Ainsworth National, the fourth largest bank, agreed to merge, creating a banking entity that kept the U.S. National corporate title and controlled resources valued at more than $2 million. Three years later, U.S. National merged with Wells Fargo Company’s Portland bank, as growth and prosperity reigned, then in 1917 the bank merged with another large Portland bank, Lumbermens National. The merger with Lumbermens National increased U.S. National’s deposits by $6.5 million and made it the second largest bank in the Pacific Northwest.

By the beginning of the 1920s, U.S. National had deposits of more than $36 million, having grown considerably during its first 30 years of operation. In the decades ahead, however, U.S. National would record growth of proportions that would dwarf its achievements during the bank’s formative decades. In 1925, the bank set the tone for the magnitude of growth ahead when it merged with the venerable Ladd and Tilton. Aside from being the region’s oldest bank, Ladd and Tilton represented a potent banking competitor, with more than $20 million in deposits and 30,000 depositors. Once Ladd and Tilton was merged into U.S. National, U.S. National received a substantial boost to its stature, becoming the largest bank north of San Francisco and west of Minneapolis, with resources totaling $64.6 million, deposits reaching $60 million, and a large base of depositors that numbered 75,000.

The 1920s were heady years for U.S. National, but as the events of the next decade unfolded, the bank faced economic conditions far more menacing than those surmounted during the 1890s. During the Great Depression more than half of the country’s banks were financially ruined, thousands of businesses were devastated, and the ranks of unemployed swelled beyond precedent. Like the economic depression touched off in 1893, however, U.S. National withstood the pernicious effects of financial collapse all around it, although deposits once again shrank during the period. Deposits reached a high of $71 million in September 1931, then over the next eight months fell by $10 million; however, by the late 1930s business began to recover and the bank’s deposits eclipsed $100 million. Perhaps the most important occurrence during the otherwise crippling 1930s was the enactment of legislation enabling banks to establish branches, which U.S. National began doing in 1933 and would continue to do thereafter.

During the 1940s, U.S. National expanded its presence geographically by acquiring existing banks and converting them to U.S. National branches, such as the bank’s 1940 purchase of the Medford National Bank, First National of Corvallis, and the Ladd and Bush Bank of Salem. Although the number of banking units comprising U.S. National’s growing branch network rose only modestly during World War II, climbing from 26 to 29, deposits nearly tripled during the war years, leaping to $581 million by the end of 1945. Following the war, when an era of widespread prosperity gave large segments of the American population substantially more disposable income than ever before, the national banking industry underwent a dramatic shift, as banks across the country began focusing on the consumer with concerted intensity. Loans for consumer purchases proliferated, and U.S. National responded by augmenting its consumer credit department with a branch consumer credit department in 1949. Bank advertising during the era reflected the significant shift in focus, as advertisements began to emphasis the availability of loans for individuals and the use of bank credit, rather than encouraging thrift as the they had done since U.S. National’s inception.

Between 1945 and 1955, 35 banking units were added to U.S. National’s branch system, the bulk of which—29—were acquired through mergers and acquisitions, as the bank swallowed smaller competitors and outpaced larger competitors with its aggressive expansion across the state of Oregon. Aside from ranking as one of the larger state banks in the nation, U.S. National also began to distinguish itself as an industry pioneer during the 1950s by offering such innovative services as driveup banking, erecting the first motor banking facility in Oregon in 1956, and leading the way with a computerized system to post checks in 1957.

In contrast to the 1950s, U. S. National expanded its branch network through internal means during the 1960s, creating new banking facilities rather than absorbing existing banking units through mergers or acquisitions. By 1965, the bank operated 100 branches across the state, a considerable presence that the bank’s directors had acknowledged the previous year by changing the bank’s name from United States National Bank of Portland to United States National Bank of Oregon. Other, more significant, changes were in the offing as the bank entered the late 1960s and began to formulate a plan for the future, in search of a way to contend with the mounting pressures affecting banks during the period.

The business of banking had become a complex and highly competitive endeavor by the 1960s, substantially more sophisticated than when U.S. National first opened its doors in 1891. In addition to a much broader range of financial services offered by commercial banks, the market for these services had become more competitive since World War II. Between 1945 and 1960, savings in commercial banks like U.S. National had doubled, whereas the amount in savings and loan associations had sextupled and the amount in credit unions had increased an enormous tenfold, absorbing business that would traditionally have gone to commercial banks.

In response, commercial banks began to form one-bank holding companies during the late 1960s, enabling them to acquire and organize other subsidiaries that could legally offer a broader range of services. With a broader range of financial services, banks hoped to beat back the competition and keep noncommercial banks from entering into financial activities that historically had been under the exclusive purview of commercial banks. On September 9, 1968, U.S. National followed the nationwide trend by forming U.S. Bancorp as a one-bank holding company, heralding the development of a vast financial services network and the extension of U.S. Bancorp beyond Oregon’s borders.

Once able to delve into new businesses, U.S. Bancorp did so with fervor, organizing a host of financial services subsidiaries during the 1970s: Bancorp Leasing, Inc., which was organized to enhance service to business customers through lease financing; U.S. Bancorp Financial, Inc., a subsidiary formed to specialize in asset-based commercial financing; and Mount Hood Credit Life Insurance Agency, which was created to centralize and streamline credit-related insurance activities throughout the U.S. National system. Numerous other subsidiaries were formed in the wake of U.S. Bancorp’s founding, transforming the U.S. National-U.S. Bancorp network into a genuine regional financial services organization.

By the beginning of the 1980s, U.S. Bancorp was well on its way to becoming one of the preeminent regional financial services organizations in the country. Decidedly acquisitive throughout the 1980s, the holding company started the decade by establishing The Bank of Milwaukee, a state-chartered bank, in 1980, making U.S. Bancorp a multi-bank holding company. During the year, the company also acquired State Finance and Thrift Company of Logan, Utah, and established Citizen’s Industrial Bank in Littleton, Colorado, further bolstering its out-of-state presence in regions where U.S. National was not allowed to operate. By the end of the year U.S. Bancorp’s territory included California, Texas, Washington, Utah, Idaho, Colorado, Montana, and its home state of Oregon, giving the company ample room to grow as the decade progressed.

With the acquisition of Spokane, Washington’s Old National Bancorp and Seattle, Washington’s Peoples Bancorp in 1987, U.S. Bancorp became the largest bank holding company based in the Northwest. During the late 1980s, the company continued to aggressively pursue smaller rival banks, hoping to achieve a dominant position in markets opened up earlier in the decade. Other large banking organizations followed a similar strategy, creating a nationwide trend toward consolidation that left U.S. Bancorp as the last major independent bank in the Pacific Northwest by the early 1990s. With $19 billion in assets in 1992, the company ranked as the 32nd-largest bank in the United States.

During the next two years, U.S. Bancorp’s management began to focus their efforts on achieving greater efficiency by streamlining the company’s operations and eliminating nearly a quarter of its work force through layoffs and the divestiture of noncore subsidiaries. After two years of implementing severe downsizing measures, the company announced a momentous acquisition in 1995 that added substantially to U.S. Bancorp’s already sizable holdings. Intent on strengthening its position in Idaho, where the company maintained only a token presence, U.S. Bancorp officials announced the $1.6 billion acquisition of West One Bancorp of Idaho in May, which the shareholders of both banking organizations agreed to in October. Once completed at the end of 1995, the deal would make U.S. Bancorp one of the 30 largest banking organizations in the country, with $30 billion in assets and $21 billion in deposits.

Principal Subsidiaries

United States National Bank of Oregon; U.S. Bank of Washington, National Association; U.S. Bank of California; U.S. Bank of Idaho, National Association; U.S. Bank of Nevada; First State Bank of Oregon; Heart Federal Savings and Loan Association; U.S. Bank of Southwest Washington; U.S. Savings Bank of Washington; U.S. Bank, National Association; Qualivest Capital Management, Inc.; U.S. Bancorp Securities; U.S. Bancorp Insurance Agency, Inc.; U.S. Bancorp Leasing and Financial; U.S. Bancorp Mortgage Company.